IKEA is the largest global furniture retailer operating in 41 countries with $32 billion in revenue in 2015. Founded in 1943 in Sweden by Ingvar Kamprad, IKEA originally sold pens and seeds from a shed. IKEA is known for its affordable Scandinavian designs through low prices and flat-packed furniture that customers assemble themselves. While IKEA has changed the way people shop for furniture through convenience and savings, their expansion has also led to some problems as customers must travel long distances and do the assembly themselves.

1. IKEA CASE STUDY
By –
SHIRIN SONALI
CET BBSR

2. What is IKEA?
Largest Global
Furniture Retailer!
Operates in around
41 countries!
32 Bn Euros
revenue in 2015!

3. HISTORY OF IKEA
Founded in 1943 by
INGVAR KAMPRAD in
Sweden.
Originally sold pens,
Christmas cards and seeds
from a SHED!
1985 – First store in
USA opens.

4. IKEA STATISTICS

5. IKEA Attributes
USP – Leading edge
Scandinavian
Design at extremely LOW prices.
Unusual Swedish
product names.
Most items come BOXED,
to be ASSEMBLED by
customers.

6. KAMPRAD’S Visions
“People have very
thin wallets. We
should take care of
their interests”.

7. Brand Positioning
HIGH Quality at LOW Prices.
“Do-It-Yourself”.
INNOVATIVE designs which can be
FLAT PACKED.
Family-friendly.
SAVINGS passed on to customers.

8. SWOT Analysis

9. Competitors
Enjoys 10% margins, higher than Target
(7.7%) and Pier 1 Imports (5%).

10. Cost Reduction and Customer Satisfaction Strategies
Stores located a good
distance from cities.
Stores optimized to SAVE
ENERGY and open for
long hours.
One way format floor.

11. (Contd.)
Restaurant stops at
store’s centres.
In-store Child Care Centres.
Finds RIGHT manufacturer
for RIGHT product.

12. Creative advertisements.
Promotional Strategies
Additional facilities –
Child Care, Restaurants
and Help Desks.
Promise of price reduction
by 2-3% on all products
annually.

13. (Contd.)
Caters to local tastes
of each country.
Smart product
placement in stores.
Incentives during
store launch.

14. PLAYS ON -
Key Psychological
Processes
Buying Decision Process

15. 1)a. What are some of the things IKEA is doing right to reach
consumers in different markets?
Affordable pricing and looks after
customer’s interests.
Stores located at a good distance
from the city.
Boxed items make it cheaper and
easier to transport for both itself
and customers.
Sources its products from multiple
companies all over the world.

16. 2)b. What else could it be doing?
It can develop a marketing strategy to
influence the reference groups of their target
customers.
Could build stores near cities
for greater accessibility.
Could invest in eco-friendly
products.
Product customization according to customers.

17. 2. IKEA has essentially changed the way people shop for
furniture. Discuss the pros and cons of this strategy.
-> PROS:
“Ambassador of Kul” like events.
Successfully combined low cost with
good quality. Items come boxed.
Greater outreach to customers,
maintaining their loyalty.

18. ->
CONS:
Assembling own items.
Not maximising on the growing
technology available for marketing and
advertising.
Having to travel long
distances.
Lack of innovation in products.

19. Conclusion
IKEA has expanded too fast in the world which
has led to problems.
It would be recommended that IKEA expands
slowly,
It should keep working
hard to keep customers satisfied.

20. RECAP

21. DISCLAIMER
Created By SHIRIN SONALI, CET
BBSR, during a marketing internship
by Prof. SAMEER MATHUR, IIM
LUCKNOW.